i support it completely. it is important to answer any types of criticism that come your way. >> thank >> with respect to burden on small institutions, i think sometimes it's perhaps my own fault for not being as clear as maybe i can be. cfpb does not enforce the law with respects to small banks. there are 15,000 within the country. our supervision authority extends to call it the biggest 105, not of 15,000. second, are any burdens associated with abiding by regulationed collected by the cfpb, though i understand the notion. the fact of matter is we have finalized two, two rule makings

since being in business for a year. one of which by its terms kept in place the status quo. that's the alternative transaction rule making. and the other is not yet effective and we have said we are considering means by which to call me providers. >> what was the second rule you came forward with? >> the remittance rule making. when now we are considering means to which provide exceptions and small requirements. you had mentioned the small business review ables that we convene. i am essentially a conservative person, i tend to be fearful and anxious about people that are new. we are the first financial regulator to conduct small business review panels. there are other two other

federal ages that do that, eacha and the e.p.a. i will confess to a certain amount of anxiety. we have been able to convene panels, the dilligence that the representatives have taken to the task at hand, the feedback we have gotten. as i think you have probably already seen in a couple of our proposals and will continue to see in our servicing proposal when it comes out we have been able to listen to quite right minded concerns and adapt to them where we can. it's been a real benefit to us a and i'm proud of the team that's responsible for that for the bureau. finally just briefly on the notion of free checking. the federal reserve board had a not insubstantial change to overdraft fee opt-in a couple years ago. we have said we will evaluate how it is the market place has changed since then.

we don't actually know how it is the market place has changed until we do the work, and as a result the notion has either promoted or prevented free checking i think is inaccurate. second, i would just point out, not just from this particular job i'm in, but from years prior, there is no free anything. one way or another, product has provided value like institutions tend to charge for one way or another. >> on june 28, they amended regulations to provide that submission of confidential information to the cfpb will not waiver any applicable privilege and to assert that the bureau's transfer of such information to another federal state agency does not waive privilege. how do you address the concerns raised by the american bar association because the proposed rule is based in part on an

association of the bureau's to -- the proposed rule may not protect the privileged status of the information. i understand that concerns have been voiced and it is a concern that caught and then finalized exactly the rule making you're referring to congressman. supervision of banks and on banks is part of what we do. of the many policy tools we have, it is the single most flexible and makes everything else better. supervision depends on confidential information being shared with regulators, full stop. you cannot create a supervisery relationship that is going to be meaningfully added to the system, which is why we finalized the rules that we discussed. >> i appreciate the intentions of the rules but i share some of the concerns of the american bar association. i believe the statutory change

is preferable. it was also stated that regulation will be helpful in removing all doubt. it is that reason why i supported it, but i also have concerns for institutions not covered. many non-bank institutions are not subject to this. many of them are also regulated by the consumer finance regulators, not state bank supervisors as currently defined under the act. at the same level i believe they should be extended the same protections when they and the regulators share information with the cfpb. i would ask you could you envision a scenario where the cfpb will collect information from a non-bank financial company? >> certainly, congressman. while given the nature of none depozztoirs, the numbers of

them, that process may not look identical to say $150 billion bank, it will rely on the exchange of information. >> can you envision a scenario where the c.f.p. might share information as opposed to a state bank regulator? >> we have propogated our point of view on when it is under confidentiality that we would share information of any kind. i believe that that takes account of that possibility where there's a shared -- i understand the situations that they're in. >> so there is a possibility? >> and i guess i would say core to the question is to the extent the confidential information can be important to enabling and effective supervisery regime we

will encyst the confidential information be shared. and we'll be awfully quite careful with it. again, our point of view is that that does not waiver attorney client privilege, but to the extension that there is doubt out there and i'm not quibbling with whether or not there is some doubt, then statutory remedies is something we would welcome. >> you can see why a nonbank institution would want the same protections extended to the consumer finance regulator that is under the act? >> by in large, the entire premise is grounded in parallel treatment. the rye dee is if you're going to be in the consumer finance business it shouldn't matter if you're a bank, broker or investment bank, you should all fall the same sort of rules. >> this is why run of the reasons i joined my colleague from colorado on h.r. 6125.

we can remove all doubt and protect a free flow of information. without objection i would like to submit for the record a letter in support of hr 2165. and i yield back the remainder of my time. >> thank you. the cfpb was created as the first regulator responsible for protecting the american consumer. in the recent enforcement action? the hearing held earlier today was entitled by the republicans. whose in your wallet, dodd

frank's impact on communities and small businesses. that was the title. it seems to me the hearings title mirrored ironically the catchphrase of capital one's commercials. in addition to credit card companies, credit bureaus also heavily affect the financial lifes of americans, and the bureau just announced its intention to supervise credit bureaus through its larger participant authority. can you elaborate on what it will mean for credit bureaus and also what it will mean for consumers? >> certainly. as actually we were just talking about, one of the key features of the cf authority is to lend to nondepositories.

i would argue certainly perhaps none more importantly than the credit bureau's and the information flows built off of it. the fact of the matter is that the work of consumer information that is captured within credit reporting companies has great benefits for credit across the united states. it is a quite remarkable thing. on the other hand it is possible that certain inaccuracies can have the consequences of trapping consumers that end up not being especially fair to them or to the system more broadly. those are issues, among others, that we hope to be able to put light on through our continued activity in the space, including our confidential supervision of credit reporting companies. as you point out this week, we finalized our rule with respect to the larger parities paints

industry, there are something like 30 firms that would be subject to that rule making. together they institute better than 90% of the revenues in that business. and we will proceed with it as soon as that rule becomes effective. >> i look forward to seeing the impact that you will have. another question, can you explain the bureau's auditting practice? who conducts them and how often are thaw required to happen? and what has been found to date through auditting processes? >> so, auditor or supervisery exams are the core activity within the supervisery process. and that is true for the cfpb and the regulators and has been true for quite some time. the key thing to remember with respect to exams broadly is that

the purpose of the cfpb's exam process is to ensure compliance with the law. it is not meant to sneak up on people. we try to be quite clear and transparent, of what the law of our exam teams are. so institutions are in a best position to ensure they are compliance management system. or to insure that they can be a conductive one and consumers are protected the way congress is intended. >> dodd frank requires that the bureau convene panels during the rule-making process to assess the effects of proposals on small businesses which are a grave concern to me. can you report on how the process has worked so far? >> yes, it has been a quite

productive early venture into the convening of small business review panels. the feedback we hear with respect to potential rule making, and to date, folding it back into proposed rules. if the purpose were to make sure we hear diversity with respect on small enterprises and making sure we're aten tive to them, i would call it an unmitigated success. >> my time has run out and i yield back. >> i recognize mr. duffy for five minutes. >> quick questions and to clarify, we have indicated that the rules that you make at the cfpb have impacts on five of the largest banks. it's also fair to say that they'll also be enforced on smaller institutions as well, is that correct? >> yeah. so our rule making authority is

meant to cover the entire landscape of firms, which is why we've been so atentative, as we were talking about a moment ago to make sure we're using the small business review panel process to ensure that the rules as crafted can ease compliance with respect to smaller firms. smaller firms, are by their nature less able to easily shoulder significant compliance burdens. they tend to be more phoenixed, which means to the extent that a firm is smaller, the equivilent compliance burden will be more biting or straining. we're making sure we're atentative to it. >> which is one of my concerns being from a more rule part of that country, i keep getting feedback from small banks and credit unions with all the rules that are coming out. within the cfpb, those who are dealing can disclosure issues,

as well as disclosure forms, are you guys all complune kating, we're not going to have different ways of have compliance for small banking institutions, are you guys all talking together? so it's going to be very fluid and we're not going to have one rule come out with q.m. that will then maybe modify -- you guys are all talking, this is going to be a very smooth process? >> yeah, dodd frank contemplates a number of reforms to the mortgage market. gwynn how many facets of the mortgage market proved to be quite not up to the task of pricing and calibrating risks. we are proceeding in three sorts of ways to make sure your concern is addressed. number one is structure. in some ways the statute itself lays out means so. so for example, which is an

important under dodd frank. there is a structural means by which they sit together. the second is process. so there is great advantage. it is not easy on the team, but creates great advantage to actually developing all of these areas simultaneously. so that we are thinking about those interactions instead of in series really thinking about them as an intergrated whole. >> so you're all communicating, trying to make it as simple as easy as possible for all these small institutions? >> yeah, absolutely. the compliance burden is fundamentally, can be dead weight in the economy, want to make things as easy as possible and consume them appropriately. >> switching gears a little bit, you've heard the argument and we've head articles as well that the new rules may reduce the power of consumers to choose

different products that work with them. the chair brought this up earlier with an example of habitat for humanity, where they may have issues of making loans to not as wealthy individuals in our community because of the risk for making that loan and the ability to repay. we saw with the other that we want to make sure people have the ability to pay. we all agree that's a sound banking principle but the side impact is if you're a spouse that stays at you may not get a credit card. i know you're trying to do the right thing, i know we're trying to make the process work better and protect consumers. but in the end there are some unintended consequences. i don't imagine you intend to have habitat for humanity not be able to engage in a loan and build a home for a low income family and communities across america. i don't imagine that's your intent but that's the reality of

some of the rules coming out. how do you plan on addressing that? >> our rule making process does not lack for deliberation or in transparency and getting feedback from the public. so in the case of habitat for humanity or loss of institutions that are concerned with providing credit to undeserved segments of the population we absolutely have heard the feedback and we're early in the process to make sure how they fit together. we take feedback for what it is intended to which is to help perform a better, more nuanced rule that work t not just for now but for long term. >> i yield back, my time is up. >> mr. miller for five minutes. >> thank you. in the last few years on this committee since the credit crisis, members who remember that they warned us repeatedly that we were on the road to ruin in subprime mortgage lending.

and that's not really my recollection. i introduced with mel watt legislation in 2004 to provide consumer protections and subprime mortgage lending. and i recall a fairly lonely fight. and the argument against it was, you mean well, this is well intended. who would otherwise who now for the first time can get credit, by homes they couldn't otherwise have bought, or will not be able to refinance. and i always acknowledge the importance of making credit available, credit being available. a well regarded member of the federal reserve board argued in the 1990's for subprime lending, but by the last decade he was arguing that the terms had become obviously abusive.

so i thought everybody agreed that a lot of loans, a lot of the mortgages in particular made in the last decade were not really such a good idea. now we're hearing the same arguments for consumer protection that it's going to constrict credit do you think that all the loans that were made in the last, all the mortgages made in the last decade should have been made? and if some consumer protection had prevented them from being made. >> well, thank you for the quick. there's no question that the credit business is a cycle. that said, not just in retrospect but at the time there were mortgage loans being made at the height of the bubble,

first half of 2007 that were simply implausible from a credit perspective. clearly loans that were being made, without for example, a lenders inquiry into a borrowers ability to repay the loan. basic reforms, frankly common sense, traditions within dodd frank would have prevented them from being made at the time. there's no question about that. >> well, also we hear the idea that these consumer protections will prevent people from making consumer choices. looking at the kind of consumer choices that those mortgages represented, particularly at the height of the bubble. because at that time subprime mortgages, whatever wholesome invasion they may have been in the 1990's, the predatory mortgages had completely shot those out of the market. the terms that made those loans subprime almost entirely predatory.

do you think we should be too worried? >> let me give you an example just from our action announce yesterday. it would be my characterization that, for example add on credit card products may make sense for some borrowers. but it doesn't make sense to make that inquiry until you're confident that the sales practices associated with those products in fact abide by the law. no one can be expected to make the right choice unless they are actually confronted with a financial services landscape that operates in a fair and nondeceptive way. i think that is the central challenge for the bureau, and it is the central thrust of the consumer reforms as i understand them within dodd frank. >> ok, i yield back.

>> mr. canseco? >> the cfpb on the website has a consumer complaint data base. there's a disclaimer attached to it that says "we do not verify the accuracy of these complaints but we do take steps to confirm a commercial relationship between the consumer and the identified company." so gwynn they don't verify these complaints but boasts that it collects thousands of them, am i correct in assuming that the database from a legal, ethical and ration nat point of view will not influence enforcement of regulatory actions by the cfpb? >> i think i lost the last part of it. you're asking me whether or not consumer complaints will not influence enforcement? >> no, no, no. you have a consumer complaint data base, but it says that it

does not verify the have rassity of those complaints. now am i to avume you don't use them at all for any of your enforcement action? >> oh, i see what you mean. >> the consumer complaint data base published, we certainly make sure we remove duplicates. and we make sure that a customer who is making a complaint is in fact a customer they are making a complaint about. we put them in without publishing a point of view as to whether or not the consumer is somehow right in the complaint. however, for a subset of the complaints that we receive, both on the randomized and in a focused way, we do conduct investigations from a subset of those and the outcomes of those investigations may or may not influence them. >> yet, they're unverified. the ones that would influence --

>> but your database says they are unverified and you will not verify the accuracy soft complaints. so why are they there for? >> why aren't you asking congressman -- >> do you use unverified complaints to use start enforcement action? or do you just have them there as a collection. >> well, there's an internal step that we obviously do with a sub set of complaints that we receive and investigate. and to the sense that those investigations result in a finding of a potential of a violation of law, then of course we would take appropriate steps after. >> so therefore it's not true that they are verified. so it's a misstatement for you to say you will not verify the accuracy of these complaints? yes or no?

do you verify the accuracy of the complaints? >> of all the complaints that are catalogged on the website? >> no, that's correct. >> therefore what is to keep your organization from putting together a campaign against a single financial institution by having hundreds of individuals send complaints to the cfpb? more importantly, who's going to verify the accuracy for such an event to occur. >> we are careful to make sure that that is why it is there is a commercial relationship between a complaint and an institution. you would not want to open the system to someone submitting thousands of complaints with respect to a firm that he or she happens not to like. so there are anti-fraud mechanisms built in. the notion though that raw number of complaints are somehow

irrelevant that would be relevant for consumers, i certainly don't see things that way. >> my time is sort of running out, are there any groups of individuals that present bonus complaints? >> we have not, as far as i know assessed any penalties with respect to so-called bogus complaints. >> ok, so moving on here one of the things that troubles me about the cfpb is your agencies ability to ban products, or at least make them so unattractive that nobody will use them. with the theory released in may, that low income or naive consumers were the primary target of lenders accused of pushing complex mortgages. the chicago fed study showed that those who took out interest only or negative loans by in

large had much higher income and higher fikeo scores than any borrowers. yet the cfpb excluded them for the qualified mortgage rule. so my question is, is the sophisticated borrower with a high income, and high credit score wants to use a complex mortgage to buy a home or invest in a second property, why should these cfpb or any other federal agencies stop them? >> it is possible you'll provide a loan or an interest only loan or be in compliance with an ability to repay the rule. obviously we have to finalize the rule as contemplated by the statute. i think what you're referring to is the qualified mortgage definition within the statute, does not provide for deferred products.

>> cfpb conducted any type of study to determine the typical consumer? i think my time is up. >> time's up. >> thank you very much. >> mr. scott, five minutes. >> yeah, thank you. in my district of georgia, significant percentage of homes are valued at less than $100,000. and with the qualified mortgages 3% cap on points and fees, many of my stitch wents will not have the access to credit if title charges, escro for taxes and insurance and loan officers compensation have to be included in the calculation. as a result of this, i co sponsored hr 4323 which is a consumer mortgage act to ensure that these fees would be included regardless of whether they are using a lender with

affiliated businesses or not. so it seems to me that any expansion of charges to be included in the finance charges will cause vast numbers of mortgages to fail to meet the standards required of a qualified mortgage. a huge part of the mortgage loan in market and georgia and elsewhere will not meet the requirements to be a qualified mortgage. so, with this information, and as i have articulated it, are you not concerned that expanding

the range of charges that must be included in the finance charge will make it nearly impossible for average consumers so with your example, we are trying to make sure that the sort of an all-in finance charge is used that it doesn't inadvertently somehow create dramatically different sweeping in and sweeping out. the hopea standards or under the qualified mortgage standards. we have comment with precisely those questions which is how is it that one should account for the conceiveably unintended

consequences of vastly increasing the universes even as we move forward. so you don't see any difficulty at all? >> i think you're right to point out the issue which is somehow blitesdzably proceeding with a new definition without being attentive, i would agree that would be a bad outcome. but due to your flagging the issue and others, the team is very much going to focus. >> so you see our legislation as a useful way of making sure that the expansion of charmings to be included will not cause vast numbers of mortgages to fail to meet the standard required of the qualified mortgage? >> and that is one of the means that we are contemplating the rule making project itself. >> i yield back.

>> the chair is going to rec nies mr. hah singa to make an introduction. >> it is nice to have a couple members of the european parliament with us today. we have ms. sharon bowls whose the chair of the economic committee sitting here and mr. peter skipper both are from the u.k. and he also serves on the economic and monetary affairs committee. and had a chance to meet sharon for the first time a short while ago. but she is the first britain of the chair to chair that committee and first female i believe to do that as well and has been chair since 2009. and then mr. skinner actually has been in parliament since 1994 and has been on this committee for 16 years.

so the committee is has the responsibility as an economic and monetary policies for the eu taxation and competition policies, free movement of capital, banks, insurance, pension funds, international monetary and financial systems. so they're here meeting with a number of our regulators and also continuing to build those relationships. peter and i had a chance to meet a few weeks ago as part of the legislative dialogue and we're looking forward to continuing to build those relationships as we know we are in a one-world market space for financial services and very pleased that you're able to join us here today. so thank you. >> thank you for that and welcome to our guests. we could have orchestrated a little more fireworks for you but we're doing business as usual here. >> thank you for being here and

your service. as i'm looking at your account and your reporting that cfpb is solely accountable for protecting consumers of financial products and services, and you go into some of the failures, home owners that couldn't understand or couldn't afford homes lost those and then the ability to repay is a repeating theme. so i wonder if the cfpb has taken a close look at what led to those home owners not being able to repay. what caused that process that began to push loans out at people? have you all done that? >> we obviously also work with the backdrop of a great deal of work that has come before and other agencies and public and private researchers. and thank you for raising because i do think it's important to go back to how it

is that we got here in the first place. >> i'm just asking not to recount and have. have you studied it? >> indeed. >> do you have any authority over fannie mae? >> our authority extends to consumer financial. >> so no? >> don't have consumer relationships in general. >> but the gse's actually according to i don't know if you've read the book, reckless endangerment but on painl 5 of that they explain that fannie mae led the way on relaxing loan underwriting standards, a shift that was quickly followed by private leppeders. and then later in the paragraph there it became the playbook for financial executives and that whole process under james johnson he began to, he spent about $100 million in ten years lobbying congress to make

certain small changes in the rules that would allow him to push those. so you had members of this committee back in 2005 were asked are you afraid that the easy lending programs -- ie that james johnson was pushing through fannie and that this institution was encouraging. are you concerned that these programs are going to wind up luring people into homes that they could not ultimately afford? so it's not this came on us in the middle of the night. it was well orkstrate by a guy that began to change the financial standards to one of loan values and he pushed 100 million toward himself in his nine years as head of fannie and freddie. so i wonder as you're concerned about the health of our consumer if you've worried about who is protecting us from policy and who is protecting us from these people who will buy

influence here to redirect if you don't do that and if you all have haven't asked those hard questions behind the scenes, then i fear that there's no one actually out here who is really concerned about the consumer. because this thing didn't begin with the banks. it began with one guy that began to buy influence here on capitol hill and with the administration it began in 1994 with president clinton buying into the idea that somehow i think in 94 that he says more americans should own their own home. that's the theme that continued through both his terms and through president bush's term. but it's during those periods that they began to restructure the policies in order to push loans to people who couldn't afford them. and when i hear that you're

just sort of blindly going along and not kicking back at the system that encouraged it it gives me great pause. it gives me a sadness that this is all just a little bit of a game that we're using the crisis to come down and we're going to lean on banks all the way up and down main street without ever really getting at the problem. the problem ornlnate in these halls and i think you all know that but i don't think you've got the courage to get out and push and say loudly but we're only looking at a piece of the problem. you're not letting us get where the real problem is. the real problem was there. it was there in the halls of congress. it was there on the financial services committee. and it was there with james johnson and when he was buying influence here. and you're not saying that. i haven't heard it once. and it just makes me sad. because you're the guys, you're the sheriff in town and you're looking the other way.

i yield back. >> mr. green for five minutes. >> thank you plap madam chair and i thank the witness for appearing. thank you for allowing me to be a part of this subcommittee. i am very much concerned about our military families and as you know members of the military are sometimes required to relocate and upon relocating they have mortgages that have to be dealt with. sometimes they have to have short sales, they have to have reif is. and these things are sometimes difficult to negotiate with servicers because what servicers perceive as a limited amount of authority. these persons who serve us in our military, they do so without question.

they go where they're told to go. families go with them. i would like to compliment if i may also the president and the first lady for joining forces initiative which helps them with education, jobs, job training. but can you explain what the cfpb is doing in concert with fdic and some other agencies to make sure that they can get the assistance that they need when they have to transfer they have to relocate to some other area because they are forced to do so as a result of serving our country? >> well, thank you congressman and thank you for your concern with respect to issues surrounding service members and their interaction with the finance system of the united states. this is a specific instance of a broader theme with the bureau and its work to date where we've tried to shine the light

on issues that are especially important to our service members. as you point out service members not infrequently are asked to change stations with so called permanent change of station orders. military home owners when they receive those orders don't have the flexibility to say no thank you i would rather stay right here and that becomes a real problem tot extent that the homeowner under water so there's no flexibility to refi away or sell the house. so we worked with the regulators to make sure that servicers were put on notice that in fact there are legal obligations to the treatment of military borrowers under a number of different statutes and that we are quite attentive to it over time. it is an area where that which congress has already done if combined with shining a bright light on the issues my hope is that we can effect real change. mrs. holly petraeus which runs

our office of service member affairs has been doing that not just mortgage but a number of markets where frankly the men and women who put on a uniform to serve the country we at some level should be attentive to the fact that they have financial circumstances that are different than most of the civilian population and we should ensure that our institutions follow the law with respect to them. >> i trust that we will promote rules that will help them to make the this transition and maintain their credit worthiness and in general not get caught with a home that they can't do anything with because of the current market conditions. i hope that you will do your best. now, i have a minute left. have you been asked any question that you would like to respond to and you need perhaps

a moment to answer or some statements that may have been made that you didn't get a chance to respond to? if so you now have a minute to do so. >> hopefully i've been responsive to questions that have been raised. given the frequency with which concerns i assume quite legitimate krps about the impact of financial reform on small community banks has been raised i think it is useful to just point out the fact that over the last decades communities banks have been pushed further and further towards the periphery of consumer finance in the united states and there's some reasons for that at least in part because we had a system that did not create an even playing field. if in general you have a regulatory system that makes it as a practical matter easier to be very big compared to very small, well then you shouldn't be surprised when community banks end up with the short end of the stick. if we do our jobs right we

should be able to help that not make it worse. >> thank you. >> mr. luket mire for five minutes. >> it's always interesting to have you before the committee. it's an interesting discussion this afternoon. can you tell me what spurs the rule making, the different areas that they get into? >> thank you, congressman. let me answer that in terms of the long term policya and then the near term not quite in that order. the near term policy agenda is set out by the statute. we have a not inconsiderable rule making agenda within the mortgage business that is mandatory and carries with it a timetable. >> let me call time out right there. what's the reason you have any idea what the reason is for the rule making request that's been made of you? >> yes.

the statute is relatively clear in most cases. >> why is the statute the way it is? why is the statute wants you to make a rule in certain instances? >> well, i know that the deliberations and debate with respect to the statute were lengthy and spirited and of course congress in its discretion has chosen a number of different rule making mandates and we have embraced them and we have moving forward with speed. >> in the course of your rule making do you do a cost making benefit of each rule? >> we do. it comes in a cousm of different flavors. one is an analysis of the cost and the benefits and the burdens associated with the rule. there's also an element that relates with plaret to the impact on relatively small institutions. >> with regard to your ress pa and tila rules have you done a cost benefit?

>> part of the reason why the document is 1100 pages long is that the new rules associated are like 60 pamings of the 1100 pages. the other thousand and 40 pages relate to loss of other requirement rule making including the cost benefit analysis. >> ok. part of the mission was to create a simpler disclosure form and something more consumer friendly and yet we wound up with a three-page long estimate at the beginning and five page long estimate at the end. do you think that's really an improvement? >> i do. both are improvements. we have been careful to reach out -- >> have you ever done a survey to see how many consumers actually read those documents? >> we concluded a qual tative

useability testing. it goes by a few different terms, something that is used at other agencies as well as not infrequently in the private sector to develop the broad contours of a piece of collateral or disclosure form so that -- >> i get it. did you ever do it? >> absolutely. >> what was your finding on the forms? have you done that yet? >> so you're referring to the general kind of difficulty that is consumers have with the current forms. >> no i'm asking you did you do the survey on the forms to see if anybody reads them? >> we did. >> what was the result? >> in general that which we have proposed is something that is easier, it would appear based on the testing to date. >> more pages and it's going to be easier to read. is that right? >> so the mandate by the congress was to combine the closing documents or the final truth and lending. >> do you know the percentage

that read the documents? >> you would be hard pressed i think to find borrowers who sit at a closing table and -- >> do you have a figure? >> i don't know the -- >> 2%? >> i wouldn't hazard a guess. >> ok. >> but we will be doing quantitative testing after the comment period ends. >> we're going to propose a rule and we don't know what percentage of people that read the stuff. is there a use for it? >> sure. this is for most people the single largest -- >> if they don't read it what good is it? >> congressman, it is -- at some level i suppose it would appear useful to know how the dollars flow. >> one more quick question for you. following the discussion here about verifying complaints, it was very concerning to me that you indicated you did not verify all the complaints, did not go through and try and figure out if they were legitimate complaint and didn't follow up if there was something that needed to be

followed up on. why? >> i feel like i was not adequately clear. to the extent that there are complaints that a consumer disputes the resolution of then we have an investigations team within our consumer response unit that will follow up with those complaints. >> but you indicated you just verified whether it was a complaint they did business you didn't tell them that you followed up on each individual complaint to see if there was something there. >> what i referred to was our approach to complaints that we received. with respect to that which we published on the website and we are quite transparent about it, that which we published on the website is the nonpersonally identifiable information associated with complaints that we received with the various data fields as we received them. it is something that will continue to populate over time. but that is -- for example, we have to -- >> my basic question was you get the complaints, you verify that it is a legitimate complaint. the person does business. do you follow up on individual

plaintiff? one individual -- you keep telling me about this subset about a whole group of people that are being abused or there's a problem. but if there's one individual case you're not following up from it from the discussion and answers you're giving me. is that right? >> with a random sample -- >> if you're giving a random sample you are not taking care of every single one of them. >> so complaints that are resolved to the satisfaction of a consumer we will not follow up and invessgation of every single one of though complaints no. >> my time is up. thank you. >> mr. mandola. >> thank you. according to fico and other sources, small amounts of medical debt that have been reported to credit bureaus can dramatically lower a consumer's credit score and keep a credit worthy customer from accessing credit and bolstering our economy. is the review of medical debt in this reporting by credit

bureaus on your radar screen? >> it is. and more broadly trying to understand the interplay between data, data accuracy its resilience and the useability of scores thereafter within the medium term and the near term supervisery agenda. >> we know it impacts the credit score. the reason i ask that question is that i practice law for several years and probably involved in three, four, 500 bankruptcies. one of the things that we saw towards the end of my law career and what we see today are people filing bankruptcy because of high medical bills. and obviously these are not large screen tvs. these are bills that were incurred because a person had no insurance or otherwise. and that being the case, it

really has no impact -- not the word impact. it really has nothing to do with the person's ability to pay the bills that would come day to day. and we're seeing even small amounts of money even if they're money for bills even if the bills are paid off that are impacting a person's credit score. that's where i want to go on it. and do you think that you would be open to look into the fact so that perhaps there may be a regulation that says if a md medical debt is under such and such amount and it's been resolved, that it no longer should be a part of a person's permanent credit record? >> i understand if issue that you're raising and i do think that we should take steps to inquire into it. it is something that has been raised also in other context, field hearings that we've conducted.

it's also angus to other issues. for example, delinquency rates for otherwise home owners one who happens to be under water because he lives in a part of the country where there's depreciation, delinquencies are higher. does that necessarily mean you are more or less likely to pay your auto loan. >> if i could send you a letter on that just laying out that issue, then -- >> we would welcome your thoughts. >> the second question i had is on ress pa. when i practiced law i closed probably 2,000 real estate closings, everything from small shopping centers and farms and residents, industrial properties et cetera. and most of those were homes. show my age but it was before ress pa took effect, i think it was in 73 or 75. what we're seeing now is going

from relatively small folder of documents to documents that can reach six, seven, eight, 10 inches high. in my experience, in fact in closing one of my own loans, is the fact that it is impossible for a perp to read through all that information and in the effort and good faith attempts by regulators to disclose tot public i think there's been so much work on that end that we really have to ask ourselves the question exactly what does the consumer need to know and perhaps start ending some of those. alex poll lock, who was the head of the federal loan i think you know him i think came up with a 1 and a half page closing statement. are you familiar with that?

>> i am. >> tell me your thoughts on that. on the closing statements. >> many of the documents at a closing are state law driven and not federal. but i absolutely agree that there has been over the period of decades i assume right minded in the moment but almost reflective reaction to there's a problem add another disclosure and at some point and i think that point is relatively early on there are diminishing returns to another sheet of paper. and i mentioned to one of your colleagues, my wife happens to be here today, we bought a house a year ago. we didn't read the documents at the closing table. at some level to the extent that things are predicated that's bad. that's why we're trying to get the most critical information in people's hand three days beforehand to have a chance to look at the most critical things. i don't think that throwing up our happeds is the right answer

but we want to make things better and not worse. >> thank you. i believe that concludes our questioning. i would like to ask for unanimous consent to insert into the record the statements from the financial services roundtable hearing no objection so ordered. the chair notes that some members may have additional question force this panel which they may wish to submit in writing. without objection the hearing record will remain open for 30 days to place those responses in the record. hearing no further discussion this hearing stands adjourned. >> today on c-span next your calls, tweets and e-mails on "washington journal." followed by "newsmakers" with armed services committee ranking member adam smith. then testimony from department of homeland security secretary

janet napolitano. and later federal reserve chairman ben bernanke on capitol hill. >> it was about those men and women who are almost motorly injured in war who because of the huge advance that is have been made in medical trauma treatment over the last ten years, now they're being saved. an incredible number of them are being saved. almost everybody who falls on the ballotfield is being saved. and i wanted to write about what life was like for these people. and i really started off with the question, having seen some people who were pretty gruesomely maimed, wouldn't it be better off if they were dead? don't they wish that they were dead? >> in beyond the battlefield, his ten part winning series and

in the subsequent e book, david wood spoke with veterans and their families on the daily struggles for those severely wounded in military operations. tonight at 8:00. >> next on "washington journal," a discussion on syria and the obama administration's response to continuing violence in the country. we're joined by andrew tablor followed by the "washington post" political managing editor on his new book the gospel according to the fix. then a roundtable discussion on aids in the u.s. as the 19th annual international aids conference begins today in washington. we're joined by pause magazine editor in chief reegen hoffman an internatial